Your Coffee Shop's New Neighbor: Starbucks Targets Small Town Expansion

Once confined to bustling cities and high-traffic retail locations, Starbucks has now set its sights on more close-knit communities. Small towns and suburbs are the new frontier, and this might leave local coffee shop owners like you wondering what to make of this new neighbor.


The Growth Story

Since 2018, Starbucks has been brewing up a storm, adding an impressive 1,500 locations in the U.S. This includes the opening of more than 400 restaurants last year alone. According to Technomic’s data, the chain outpaced every other U.S. restaurant chain in terms of expansion.

During a recent earnings call, Starbucks CEO Laxman Narasimhan spoke to investors, putting it plainly: “We have an opportunity with regard to net store growth in the US. There’s real headroom for us to locate our stores where we see customer growth, smaller towns, different geographies.”

But what's behind this move to smaller towns? Why leave the bustling city behind for quieter locales?


Why Small Towns?

More chains have started eyeing small towns for a few reasons:

  1. Less Saturated: As big chains grow, they saturate more metro areas, leaving few fresh locations to conquer. When they’re forced to look elsewhere, smaller communities become an attractive prospect.
  2. Economically Sound: The eye-watering real estate costs in big cities can make the more humble real estate of small towns a tempting proposition.
  3. Less Competition: Unlike big cities where competition is fierce, smaller towns might offer a warm welcome, especially if there's a lack of coffee shops or dining options.

Big Chains with Small-Town Success

This isn't an entirely new trend. Other chains have been testing the small-town waters for years, reaping the benefits.

  • McAlister's Deli and Wisconsin-based burger chain Culver's have been using smaller cities as their stomping ground, showing that big name and small-town charm can go hand in hand.
  • Chipotle Mexican Grill has been dishing out success in smaller markets too, so much so that they have even increased their expansion goals for the year.

Compared to these chains, Starbucks has more locations than Chipotle, Culver’s, and McAlister’s combined. A big leap, but it's not completely uncharted territory.


What Does This Mean for Local Coffee Shops?

Starbucks are big, but that doesn't mean they'll push you out. Their expansion could potentially bring more attention to the love of coffee in your community, but it also means a new level of competition. 

However, what a global chain like Starbucks can't replicate is the unique local flavor, the community connection, and the personal touch that you offer. You know your neighbors. You know what they like in their coffee. You have that hometown feel that Starbucks can't copy.

But it's still good to know what's happening. If Starbucks comes to your town, you need to be ready.


In Conclusion

Starbucks moving into local towns is a significant development, but it's not necessarily a gloomy forecast for local coffee shops. While Starbucks aims to become a familiar face in smaller towns, remember that you are the heart and soul of your community. Embrace what makes your place special, and you might find that there's room for both the global giant and the beloved local coffeehouse.